Non-domestic water market not ‘truly open’

Utilitywise suggests only 1 per cent of businesses have switched supplier

Utilitywise has claimed the non-domestic water retail market in England is still not “truly open”, suggesting that only 1 per cent of businesses have switched supplier.

Responding to figures released by Market Operator Services Limited (MOSL) yesterday (26 October), the utility consultancy firm suggested it would take until 2039 for all businesses in England to switch water supplier.

The company has called on the secretary of state for Department for Environment, Food & Rural Affairs (Defra), Michael Gove, to put customers first and make the “water market truly open and honest”.

MOSL’s figures showed the pace of water switches has slowed in the second quarter since market opening, with just 25,010 supply points having switched water retailer in the period.

It takes the total number of switches since April to 61,311 representing only 2.3 per cent of the 2.7 million supply points in the market.

The industry saw a 31 per cent decrease in the number of switches compared to the first quarter after the market opened.

Brendan Flattery, chief executive of Utilitywise, said: “The water market deregulated on 1 April, but we have learnt that just 1 per cent of businesses have switched water supplier, showing that the water market is still not truly open.”

He added: “It beggars belief that there has been a decrease in switching over the past quarter, proving once again that Ofwat has not been given the authority to enforce policies which would result in better deals for customers.

“While MOSL has dressed up their poor results as ‘steady progress’, at this rate it would take until 2039 for all businesses across England to switch water supplier and start saving money.”

Analysis from Utilitywise suggests the number of businesses who have switched supplier is just 1 per cent as small businesses often have two meter points.

The company has called on Gove to release the figure for the number of businesses who have switched water supplier since deregulation, as “a true measure of its success”.

In July, Flattery wrote to Defra to outline Utilitywise’s plan to make the water market open, honest and competitive.

It said the “disappointing figures” further strengthens the case for Ofwat to be given the “authority by Defra to hold water suppliers to account”.

Flattery believes the company’s “three-point plan” will unlock “£200 million worth of collective savings for businesses across England”.

He said: “Michael Gove must empower Ofwat with the strength and authority to fight for small businesses, whilst releasing the figure for the number of businesses who have switched water supplier so far.”

Emma Kelso, Ofwat’s senior director of customers and casework, said: “We would still like to see more transparency from retailers about offers available to customers and will continue to monitor this closely.

“We are also engaging with customers via insight surveys to find out more about experience and how we can work with retailers to make the market work in the best way possible.”

A spokesperson for Defra added: “We continue to work with Ofwat and MOSL to monitor the market and make sure it works for all customers, including better service, water efficiency and value for money.”

A MOSL spokesperson commented: “Since the market opened, MOSL has reported on the number of supply points switched in the market. We are looking into the market information as it develops and how we can get improved visibility of switching numbers at customer level. 

“We have always recognised that many customer premises have multiple supply points and that this needs to be taken into account when reviewing the switching numbers. We have continued to see switching across all consumption segments in the second quarter of the new market.”